In the best year for the freight transportation industry since the Great Recession, logistics managers chalk up efficiencies that drive further U.S. economic growth. However, capacity issues persist, causing shippers to worry about rate hikes as carriers continue to be meticulous in their partnerships.

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POLB officials observed that April’s gains are part of an ongoing stretch of what they termed as steadily increasing activity. A good portion of this activity can be attributed to ocean carriers adding services to Long Beach in recent months, including CMA CGM and MSC.

An a port spokesman recently explained to LM that a new service line between ocean carriers MSC and CMA CGM that moved from POLA to POLB recently commenced, with both carriers having established hubs at POLB, with vessels calling on POLB. MSC is sharing a POLB hub with COSCO and MSC is in a terminal sharing arrangement with Hanjin at POLB.

On a year-to-date basis, overall volume for POLB is up 17.2 percent, with imports up 18.5 percent at 1,042,312 TEU. Exports were up 11.8 percent at 561,416 TEU, and empties were up 21.5 percent at 469,666 TEU.

Total April volumes at POLA fell 9.45 percent annually, due to the aforementioned vessel services that have left the port in recent months.

April imports were down 10.36 to 326,780 TEU, and exports dropped 14.3 percent to 160,129 TEU, with empties off 1.45 percent.

The most recent edition of the Port Tracker report from the National Retail Federation and Hackett Associates noted that import growth at major U.S.-based retail container ports is expected to increase 3.3 percent annually in May, but cautioned that growth could slow down considerably by the end of the summer.

“The weak cargo increases expected over the next few months are consistent with other signs that the economy is slowly improving but show that retailers remain cautious, especially when it comes to stocking their inventories,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “We’re looking at barely 1 percent of year-over-year growth through the early summer, and August and September are expected to be basically flat even though they’re supposed to be two of the busiest months of the years. With consumer confidence low, employment struggling to recover, and less money in shoppers’ pockets because of the payroll tax hike, we need to see action from Washington that will provide some fiscal certainty for families and businesses alike.”

Hackett Associates Founder Ben Hackett said in the report that despite the Federal government pumping liquidity into the market, consumer confidence still has not fully turned the corner despite significant growth from its recent low points in 2009 and 2011.

“The uncertainty seems to be completely ignored by investors on Wall Street as the Dow climbs to new and dizzy heights,” he wrote. “There seems to be less discussion about austerity measures as doubt has been cast on the validity of the fundamental economic analysis to support cost cutting whilst at the same time trying to encourage growth. As we can see in Europe, it does not appear that the two concepts go hand in hand. We need to see the economy strengthen in the coming quarters before we can begin to see the threat of a further economic downturn dissipating. Trade will remain at low growth levels until we reach this stage. One thing is clear: the impact of globalization and the shifting of production to the East has come to an end and carriers cannot count on growing volumes in a world of low consumer spending. The benefit to importers will be a longer period of low freight rates as supply continues to outpace demand.”

About the Author

Jeff BermanGroup News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

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